KANE: POSTAL SERVICE TO FOCUS ON CORE PRODUCTS: PLAN FOR STAMP OF BUGS BUNNY EXEMPLIFIES NEW PRIORITIES, SAYS MARKETING CHIEF

That wascally wabbit is in, but the wascally U.S. Postal Service may become less so under new marketing chief Allen R. Kane.

Mr. Kane, while promising to keep up the pressure on rivals through advertising supporting Priority Mail, also plans to return the marketing focus to traditional products.

Stepping back from some of the aggressive efforts of predecessor Loren Smith, the new senior VP-chief marketing officer said he sees growth in postal revenue coming mainly from better promotion, sales and value-added extensions for existing products.

Ad campaigns like the one built around the May release of the Bugs Bunny stamp will take precedence, said Mr. Kane.

'OUT OF BALANCE'

"Our future is in the core business. We were out of balance-there was a whole lot of focus on research and development," said Mr. Kane, a 25-year veteran of the postal service who previously was VP-product management.

When he arrived in 1994, Mr. Smith was a newcomer to the postal service, but wielded marketing acumen gained at companies including General Foods Corp. and Colgate-Palmolive Co.

The postal service won't abandon new-product development, however. Mr. Kane hinted that a proposal to extend Priority Mail by offering a new, less expensive in-town "local delivery" rate is imminent, and he said the postal service is examining whether to try to set rates for a Pack & Send service.

Bugs Bunny heads for envelopes after being spokesman since last October for the Stampers program that aims to encourage children to collect stamps. The campaign from Foote, Cone & Belding, New York, was targeted at getting 500,000 children a year to call an 800-number to obtain information. The postal service said 500,000 called in one month and more than 1 million in the first two months.

BLOCKBUSTER STAMPS

Now with the Warner Bros. character becoming a stamp, the postal service will kick off a campaign to promote its blockbuster stamps in mid-May with the first of two aggressive TV and print flights. Advertising also will support a Wide World of Dinosaurs stamp sheet.

The postal service blockbusters this year, in addition to Bugs and the dinosaurs, include a Humphrey Bogart stamp, a legendary football coaches series and, for Halloween, a Great Movie Monsters series.

For Bugs, the postal service also has a merchandising deal with Warner Bros. Studio Stores that calls for T-shirts and other related merchandise picturing the stamp to be sold by both. Warner Bros. is also planning promotions.

Mr. Kane said the postal service will boost ad spending this year, budgeting as much on the Priority Mail campaign as did Mr. Smith, who lost his job because of excessive spending.

Despite the Priority Mail campaign's success in comparing pricing, it has been controversial, sparking a lawsuit and counter-advertising from Federal Express Corp.

Mr. Kane said he had no intention of returning the fire.

NOT 'THROWING ROCKS'

"I am not in the game of throwing rocks," he said. "What I want to talk about is the value of the product . . . We are in this for the long haul, not for a week or a month. We have a good product, and we will play up the attributes."

The postal service will be changing its advertising for its direct mail service, however.

Last year's business-to-business advertising comparing the postal service with direct marketers and magazines angered both of those groups and resulted in the ads from Wunderman Cato Johnson being toned down and eventually pulled.

This time, the postal service sought reaction from the groups before running ads.

Mr. Kane said he also intends to proceed carefully on requests for sponsorship. Last year, deals to sponsor the Democratic and Republican national conventions and the postal service's attempt to market T-shirts featuring Olympics-related